TDS on Loan Interest

[Asked by Guest]

Dear Sir,

We are Loan taken from TATA Finance how do deduct TDS  interest on repayment.

Thanking You

[harish khona]

DEAR SIR,

WE HAVE SIMILAR TYPE OF CASES OF SUNDARAM FINANCE, RELIGARE, INDIA BULLS AND OTHER FINANCING COMPANIES, THE ASSESSEE PAYS THE TAX ON INTEREST AND CLAIMS REIMBURSEMENT FROM THE COMPANIES BY PRODUCING THE COPY OF CHALLANS TO THEM.

THERFORE YOU CONTACT TATA FINANCE AND WE UNDERSTAND FROM OTHERS IN THIS AREA THAT TATA FINANCE FOLLOWS THE SAME PRACTICE. PL CONTACT TATA FINANCE.

REGDS HARISH KHONA

 

 

[DEV KUMAR KOTHARI]

Tax will be deducxted only on the element of interest involved in repayment by way of EMI  or otherwise. On principal sum there will be no TDS.

AI Summary

TDS on loan interest applies only to the interest component; borrower may pay tax and seek reimbursement from lender.
TDS applies only to the interest component of loan repayments; principal repayments are not subject to TDS. In practice borrowers sometimes pay tax on interest themselves and claim reimbursement from the finance company by producing challans, so confirm the lender's procedure and retain proof of tax payment when seeking reimbursement.